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A "precarious" financial state amid forecasts of £35.5m deficit and the lack of clarity over the future shape of acute clinical services across North Wales were identified among "significant challenges".

Urgent action is also needed to review the board’s organisational structure, strengthen internal accountability for safe and effective services, and improve responses times to complaints and serious incidents.

The findings came in a joint report by the Wales Audit Office and Healthcare Inspectorate Wales a year after their original bombshell assessment that raised fundamental concerns over Betsi’s inability to identify issues concerning the quality and safety of patient care.

The follow-up review concluded that the board "still has considerable work to do before its governance and management arrangements can be regarded to be fully fit for purpose".

In the wake of last year’s report, the chair, Professor Merfyn Jones vice chair Dr Lyndon Myles and chief executive Mary Burrows all announced they would quit.

Mary Burrows

A new chair, vice chair, medical director and executive nurse director have all been appointed, bringing a "fresh dynamic" to the leadership.

But the report was critical that it took the best part of a year to replace the chief executive in June.

“The time taken to secure this appointment has significantly hampered the progress,” Auditor General for Wales Huw Vaughan Thomas said. “Progress has been made but significant challenges remain, and will need to be addressed with some urgency if the health board is to rebuild the confidence in its abilities amongst its staff, key stakeholders and the people it serves.”

The board had made a number of changes to strengthen the reporting, escalating and investigation of concerns.

“The number of unresolved concerns, complaints and Serious Untoward Incidents (SUIs) has fallen, but continues to be substantial,” the report said.

The lack of a clear strategy for future acute services was a concern.

“It is inevitable that difficult decisions will need to be made on where certain services will be provided and the health board must avoid further delay in making these decisions,” the report said.

AMs on the Assembly’s cross-party public accounts committee are due to question board executives next week.

Chair of the committee, Clwyd West AM Darren Millar said: “The Public Accounts Committee is concerned that Betsi Cadwaladr University Health Board still faces significant challenges with regards to the future shape of its clinical services and its precarious financial position.

“We maintain the belief that the senior management team still has a huge task ahead in restoring public confidence.”

Dr Peter Higson, chairman of Betsi health board said: “On behalf of the board, I very much welcome this report. It confirms that we have made progress in addressing the issues identified by Wales Audit Office and Healthcare inspectorate Wales in 2013 but also that we have more to do.

“The pace of change within the health board will now quicken following our new chief executive Prof Trevor Purt taking up post in mid June.”